Shareholders' Equity

9 Months Ended

Sep. 30, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

8.  Shareholders’ Equity

Distributions

For the three months ended September 30, 2016 and 2015, the Company paid distributions of $0.30 per common share for a total of $57.2 million and $52.6 million, respectively.  For the nine months ended September 30, 2016 and 2015, the Company paid distributions of $0.90 and $0.97 per common share for a total of $161.9 million and $176.8 million, respectively.  Additionally, in September 2016, the Company declared a monthly distribution of $0.10 per common share, totaling $22.3 million, which was recorded as a payable as of September 30, 2016 and paid in October 2016.  As of December 31, 2015, a monthly distribution of $0.10 per common share, totaling $17.4 million, was recorded as a payable and paid in January 2016.  These accrued distributions were included in accounts payable and other liabilities in the Company’s consolidated balance sheets.

The Company’s current annual distribution rate, payable monthly, is $1.20 per common share.  On April 23, 2015, the Company’s Board of Directors, in anticipation of the Listing, reduced the annual distribution rate from $1.36 per common share to the current annual distribution rate, effective with the June 2015 distribution.

Reverse Share Split

In connection with the Listing, effective May 18, 2015, the Company completed a 50% reverse share split.  As a result of the reverse share split, every two common shares were converted into one common share, reducing the number of issued and outstanding common shares from 372.2 million to 186.1 million on the effective date.  The common shares have the same respective voting rights, preferences and relative, participating, optional or other rights, and qualifications, limitations or restrictions as set forth in the amended and restated articles of incorporation in effect immediately prior to the effective date of the reverse share split.  All common shares and per share amounts for all periods presented have been adjusted to reflect the reverse share split.

Issuance of Common Shares and Stock Options

On September 1, 2016, in connection with the completion of the merger, as described in Note 2, the Company issued a total of 48.7 million common shares to Apple Ten shareholders.  Based on the $19.62 per share closing price of the Company’s common shares on August 31, 2016 (the date the merger was approved), the total estimated value of the common shares issued by the Company in the merger was approximately $956.1 million.  In connection with the issuance of these shares, the Company incurred approximately $1.2 million in issuance costs including legal, accounting and reporting services.  These costs were recorded by the Company as a reduction of shareholders’ equity.  Additionally, pursuant to the terms of the Merger Agreement, all of Apple Ten’s outstanding stock options were exchanged for stock options to acquire a total of 203,041 common shares of the Company at an exercise price of $19.17 per share.

Share Repurchases

In connection with the Listing, the Board of Directors approved a modified “Dutch Auction” tender offer to purchase up to $200 million in value of the Company’s common shares (the “Tender Offer”), which commenced on May 18, 2015 and expired on June 22, 2015.  Upon expiration, the Company accepted for purchase approximately 10.5 million of its common shares, at a purchase price of $19.00 per common share, for an aggregate purchase price of approximately $200 million, excluding fees and expenses related to the Tender Offer.  The total common shares accepted for purchase represented approximately 97% of the common shares properly tendered and not properly withdrawn at the purchase price of $19.00 per common share.  Payment for shares accepted for purchase occurred on June 24, 2015, and the shares purchased were retired.  The Company incurred approximately $0.6 million in costs related to the Tender Offer which were recorded as a reduction to shareholders’ equity in the Company’s consolidated balance sheets.  The Company funded the Tender Offer and all related costs primarily from borrowings under its $965 million credit facility.  

During 2015, the Company’s Board of Directors authorized a share repurchase program of up to $500 million through July 7, 2016.  Effective July 8, 2015, as part of the implementation of the program, the Company established a written trading plan (“2015 Plan”) that provided for share repurchases in open market transactions that was intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.  To be able to more effectively respond to market conditions, the Company terminated the 2015 Plan in January 2016.  From implementation through the termination of the 2015 Plan, the Company purchased approximately 1.3 million of its common shares under the 2015 Plan, at a weighted-average market purchase price of approximately $17.62 per common share, for an aggregate purchase price of approximately $22.4 million, including the purchase of approximately 20,000 of its common shares in January 2016, at a weighted-average market purchase price of approximately $18.10 per common share for an aggregate purchase price of approximately $0.4 million and approximately 1.2 million of its common shares in the third quarter of 2015 at a weighted-average market purchase price of approximately $17.59 per common share for an aggregate purchase price of approximately $21.2 million.

In June 2016, the Board of Directors approved a one-year extension of the share repurchase program authorizing share repurchases up to an aggregate of $475 million.  The program may be suspended or terminated at any time by the Company.  If not terminated earlier, the program will end in July 2017.  Effective September 2, 2016, as part of the implementation of this program, the Company established a written trading plan (“2016 Plan”) that provides for share repurchases up to an aggregate of $400 million in open market transactions that is intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.  The timing of share repurchases and the number of common shares to be repurchased under the 2016 Plan will depend upon prevailing market conditions, regulatory requirements and other factors.  The 2016 Plan does not obligate the Company to repurchase any specific number of shares and may be suspended at any time at its discretion.  The Company had not repurchased any common shares under the 2016 Plan as of September 30, 2016.  Repurchases under the 2015 Plan have been funded, and the Company intends to fund repurchases under the 2016 Plan, with availability under its revolving credit facility.

During the nine months ended September 30, 2015, the Company redeemed approximately 0.8 million common shares at a price of $18.40 per common share, or a total of approximately $14.9 million under its previous share redemption program that was terminated following the April 2015 redemption.